What was the increase or decrease in due to related party for Crawlspace Medic in 2023?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
24 | $ | 216,112 | $ | 460,495 |
STATEMENTS OF CASH FLOWS CSM FRANCHISE GROUP, LLC
| 2023 | For the Years Ended December 31, 2022 | 2021 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ 1,149,783 | $ 808,447 | $ 954,060 |
| Change in noncash rental assets and liability | (1,167) | - | - |
| Changes in operating assets and liabilities: | |||
| (Increase) decrease in franchisee fees receivable | (53,100) | 280,000 | (275,000) |
| Decrease in royalty fees receivable | - | 9,972 | 3,918 |
| (Increase) decrease in due from related parties | - | 9,599 | (9,599) |
| (Increase) decrease in prepaid expense | (21,437) | 6,918 | (12,168) |
| Increase (decrease) in accounts payable and | |||
| accrued expenses | 4,691 | (11,088) | 22,144 |
| Increase (decrease) in due to related party | 15,096 | (1,444) | (20,676) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,093,866 | 1,102,404 | 662,679 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Payment on related party financing | - | - | (21,460) |
| Member's withdrawals | (1,029,271) | (1,052,830) | (641,150) |
| NET CASH USED IN FINANCING ACTIVITIES | (1,029,271) | (1,052,830) | (662,610) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 64,595 | 49,574 | 69 |
| Cash and cash equivalents at beginning of year | 22 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the increase or decrease in due to related party in 2023 was an increase of $15,096. This figure represents the change in the amount Crawlspace Medic owed to related parties for payroll costs. In 2022, the decrease was ($1,444). In 2021, the decrease was ($20,676).
Specifically, this refers to the amount Crawlspace Medic owed to Bloom Management, LLC for payroll costs. Bloom Management, LLC, shares common ownership with a member of Crawlspace Medic and performs all management functions for the company. The amounts owed were $15,096, $0, and $1,444 as of December 31, 2023, 2022 and 2021, respectively.
For a prospective franchisee, this indicates the financial relationships Crawlspace Medic has with related parties and how these relationships impact the company's cash flow. It's important to note that all related party transactions are believed by Crawlspace Medic to occur at arm's length. Understanding these related-party transactions can help a franchisee assess the financial stability and transparency of Crawlspace Medic.